U.S. Treasury and IRS Give Crypto Users More Time to Adjust to $10,000 Reporting Requirement
The U.S. Treasury Department and the Internal Revenue Service (IRS) announced on Jan. 16 that businesses do not have to report transactions involving digital assets, such as cryptocurrencies, until further regulations are issued.
The announcement comes after the Infrastructure Investment and Jobs Act, which was signed into law in November 2023, revised the rules that require taxpayers that are engaged in a trade or business to report receiving cash of more than $10,000. The law expanded the definition of cash to include digital assets, which raised concerns among the crypto industry and advocates.
According to the announcement, the Treasury and the IRS will provide transitional guidance as they implement the new provisions, which require them to issue regulations before they go into effect. The announcement also stated that the existing rules for reporting cash received in the course of a trade or business, which must be reported on Form 8300 within 15 days of receipt, are not affected by the new law.
The Treasury and the IRS said they intend to issue proposed regulations to provide additional information and procedures for reporting the receipt of digital assets, and will give the public an opportunity to comment both in writing and, if requested, at a public hearing.
The announcement was welcomed by the crypto community, which had been lobbying for more clarity and flexibility on the reporting rules. Some crypto advocates had argued that the new law would impose an undue burden on businesses and individuals that use digital assets, and could stifle innovation and growth in the sector.
The announcement also follows a recent report by the Government Accountability Office (GAO), which recommended that the Treasury and the IRS improve their guidance and oversight of the tax implications of digital assets. The report found that the IRS had not updated its guidance on digital assets since 2014, and that there were gaps and inconsistencies in the information provided to taxpayers and tax professionals.
The GAO also suggested that the Treasury and the IRS collaborate with other federal agencies, such as the Financial Crimes Enforcement Network (FinCEN) and the Securities and Exchange Commission (SEC), to ensure a coordinated and consistent approach to the regulation and taxation of digital assets.
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